The U.S. dollar climbed against most major counterparts in early European deals on Thursday, as the Federal Reserve stuck to its plan for raising the interest rate again later this year and chose to begin the reduction of balance sheet from October. The Fed will start thinning out trillions from its balance sheet in October as it works to wind down its bond-buying program. That helped send bank stocks higher.
S&P Global became the second major rating agency this year to cut China's credit score, citing worries about the country's rising debt levels and the risks that posed for financial stability in the world's second largest economy.
Bed Bath & Beyond dropped 15.9 percent after the home goods retailer reported that its latest quarterly sales at stores open at least a year, a key metric for retailers, fell short of analysts' forecasts. They did, however, indicate that one more hike is possible before year-end.
The Dow Jones Industrial Average added 42 points, or 0.19% to end at 22,413, its seventh straight record close. The Nasdaq slipped 5 points to 6,456. Japan´s Nikkei gained 0.2 percent as a rise in USA bond yields lifted financial shares, while the yen´s fall against the dollar after the Fed´s decision helped exporters. Fifteen of the 17 banks responding to the survey expect a rate rise by the Fed's final meeting of the year in mid-December, while two saw no change.
The Fed statement also sent the dollar higher against other currencies. In addition, utilities stocks fell 1.7%, nearing 2017 lows.
The gold price and interest rates / bond yields usually move in the opposite direction as gold produces no income and investors have to rely on price appreciation to book returns. Bank of America rose 1.4 percent.
The Fed built up its portfolio of government and mortgage-backed bonds in response to the Great Recession - an effort to keep borrowing costs low to help spur more economic activity and protect home prices that had been cratering after the housing bubble burst a decade ago.
The ten-year Treasury yield was trading at 2.278-a gain of ~0.1%.
The Standard & Poor's 500 index fell 4 points, or 0.2 percent, to 2,502.
The crown was up 0.4 percent at 9.314 per euro and 0.7 percent firmer against the dollar at 7.82 crowns.
The recent deadly hurricanes that caused catastrophic damage in two southern USA states might force the Fed to postpone a rate increase until next year, analysts said.
You can bet that Yellen, whom former President Barack Obama appointed as the first woman to lead the Federal Reserve, will be asked by reporters on Wednesday. Japan Petroleum (1662.TO) rose 3% and Australia's Santos (SSLTY) gained 2%.
Energy stocks also rose as oil prices headed higher.